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- [00:02]
A
It's May 19, 2026 and this is the Commerce Riff, brought to you by the CPG guys. 10 minutes of the news stories that matter in Commerce this week. I'm your co host, pbsb and I'm joined as always by Paparazz, the father of pop stars, co founder of Think Blue Consulting, sree, How's your week going?
- [00:20]
B
My week was going pretty well, Peter. We're a week away from the AMAs. I'm very excited, but the story of the day is not that. The story of the day is your trip to New York City to see the matinee of Wicked. Tell us.
- [00:31]
A
Yeah, I took Nadia, we rode Metro north into the city, took the shuttle over to the 1 train, up to 50th and into the Gershwin Theater. We had fifth row seats in the center orchestra and it was magical, Sri Just watching my daughter sing along with all the songs that she'd learned and knew so well. It was a magical event. We managed to grab lunch at the Shake Shack at Grand Central and even pick up some cupcakes from Magnolia Bakery. It was a wonderful time. Sri.
- [01:06]
B
Was it magical or was it wicked?
- [01:08]
A
It was wickedly magical. How about that? All right, let's get into it. Four stories this week that cut across the full spectrum. It was a huge earnings week across the CPG brand spectrum. Starbucks announced layoffs we keep going back and forth as a nation on inflation. We have the latest on grocery inflation and it's not great. Finally, activist investors work on target board appointments. So let's get into it. Tomato prices were up nearly 40% year over year in April, the quickest rate of inflation among the food at home categories that the Bureau of Labor Statistics tracks. Food at home prices rose in April at a 2.9% annual clip, the fastest pace of increase in almost three years, according to the CPI data released Tuesday by the BLS. 3. Inflation moved up 0.7% last month compared with March, when the metric eased slightly on a month to month basis, Tomato prices increased nearly 40% compared with the same period in 2025, the highest rate of inflation among the food at home categories. Grocery inflation remained somewhat of a holding pattern due to the final two months of 2025 and the first quarter of this year, bouncing between a yearly pace of 1.9 and 2.4%, but that pattern abruptly ended in April. The annual pace of food inflation moved up by a full percentage point last month compared with March, the latest month to month increase for the metric since May 2022, when prices were skyrocketing and the inflation was double digits. Grocery inflation came in at 1.9% in March. The 2.9% rate of food at home inflation recorded in April is the highest since August 2023, when grocery inflation stood at 3%. Overall inflation at 3.8% in April, the highest rate since May 2023. The BLS did not release inflation figures for most categories for October 2025 because of the federal government shutdown. How convenient. Meat prices continue to play a central role in pushing prices up in April with beef price inflation remaining in double digits. Prices for uncooked beef roasts were up almost 18% last month compared with their level a year ago, while prices for uncooked beef steaks surged at just over 16% in uncooked ground beef was up 14.5%. Shoppers also played significantly more for produce in April as prices for fruit and vegetables moved up approximately 6%. Fresh vegetable prices were up an especially fast clip, raising at a rate of 11.5%. Coffee was another source of pain for grocery shoppers. Thank God I don't drink that swell as the beverage cost almost 20% more last month than it did a year ago. On the other hand, prices for poultry were up less than 1% with prices for fresh whole chickens declined nearly 2%. Egg prices, which were a symbol of high grocery prices last year, fell more than 39%. Big news. Sree, what else do you got for us?
- [04:07]
B
I think, Peter, this notion of inflation is completely recovered is based on the data here released by the Bureau of Labor Cities. Because it's false. We're looking at egg prices and determining where inflation is. Eggs have certainly been controlled at this point. That's pretty clear. But everything else is through the roof. That's why Peter and we are going to trade at Joe's repeatedly because it's half the price of a full basket anyway, after a long time. We've seen a week where we had it was earnings bonanza week and we saw a bunch of consumer goods companies reporting and then we have healthy news across the board. So consumer staples companies delivered a broadly positive and resilient set of earnings last week, with pricing power continuing to support revenue growth even as volumes remained under pressure too. Remember Peter, there was a two year period, there was no pricing and most consumer goods companies actually, from a stock standpoint, suffered. Does it mean we're now entering an era where pricing is everything, which means inflation? Here we go. Broadly, the consumer staples sector SPDR Fund XLP has outperformed the SPDR S&P 500 ETF Trust SPY year to date rising about 8.35% versus roughly 5.6 for the broader market, driven by a clear defensive rotation to staples. Out of 35 consumer staple names that are part of The S&P 500 SPY, 12 reported earnings last week. That's a third with most delivering beat on estimates. 11 out of 12 firms beat EPS estimates while one reported inline numbers. This stark contrast to what we spoke about. General Mill fell short of estimates. Of the 12 companies on the S&P 500 index, 10 reported year over year earnings growth. Nine saw top line growth. One of our Favorites, Coca Cola Q1 earnings report comfortably beat expectations across nearly every key metric and the move higher ripple through the broader consumer staple space. Global unit case volume grew 3% during the quarter with all segments positive. Congratulations to Coca Cola volume growth. All three are top Q1 estimates with revenue up 3.2% to 5.3 billion. Adjusted EPS of dollars 132 as higher pricing offset declining shipment volumes. A favorite of ours, Colgate Palmolive upped consensus estimates of analysts with its Q1 earnings report revenues of 8.4% to 5.32 billion. Non GAAP EPS was $0.97 versus the 94 consensus and $0.91 a year ago. The company said its leadership in toothpaste continued its global market share at 41.1 year to date while its leadership in manual toothbrushes continued with global market share 32.6. Here comes another of our favorites. Hershey HSY chocolate maker set a profit guidance for the year with a midpoint that is less than Wall street estimates, though it did beat Q1 estimates. Its candy mid income segment retail takeaway increased 8.1% despite higher prices. Share of Clorox came under pressure after the company's fiscal Q3 results and outlook for the year suggested continued headwinds for the consumer products company. Its non GAAP EPS of $64 beat by $0.1 while its top line was at 1.67 billion in line with estimates but no year over year growth. A reminder we had a episode recently from Cagny with their leader, the person who leads the actual engineering and R and D and innovation and Pat Corsi from Chief Marketing Officer mondelez international saw Q1 organic sales jumped 3% beating estimates with revenue up approximately 8% driven by strong growth in emerging markets. However, adjusted EPS fell 14.9% year over year to $0.67, missing expectations as margin pressure from higher input costs offset pricing gains. You know Mondelez is one of those at bucket with general Mills looks like it's lost its way in the last couple years, especially with cocoa pricing going up and the results back to back at the industry level. 4 household products, 3 food products, 2 beverages, 1 personal care product, 1 tobacco and 1 distribution retail company reported earnings this past week. Amongst the other consumer staple names that are reporting earnings this upcoming week, Archer Daniels Midland, Ken View, Kraft Heinz, Tyson Foods and Peter and I will report against all of those the following week. Over to you Peter. I think you said something about Starbucks and layoffs.
- [08:15]
A
I did, but before we move to that Sree, since you mentioned Colgate's results, I'd be remiss if I didn't congratulate Brigitte King, the Chief Digital Officer at Colgate Palmolive who recently announced her departure. She made a notable impression a number of years ago, appearing in a Cagney conference. She set an incredible tone for what follows at Colgate Pall Mall. So Brigitte, we wish you well in your next endeavor. All right. Starbucks on Friday announced another round of corporate layoffs and said it plans to shutter some regional support offices as part of its ongoing turnaround. The company said it will cut 300 US jobs, adding it has started a review of its international corporate corporate workforce. The layoffs did not affect its coffee house employees. The combined severance costs and reassessment of its office space will result in restructuring charge of $400 million. The coffee change said Starbucks expects to record $280 million in non cash charges related to the impairment of long lived assets and 120 million in cash charges tied to the job cuts. We're taking further action under the back to Starbucks strategy, building on our strong business momentum and working to return the company to durable, profitable growth. As Starbucks spokesperson said in a statement to cnbc, leaders have taken a hard look at their respective functions to further sharpen focus, prioritize work, reduce complexity and lower costs. Friday's announcement marked Starbucks third round of layoffs and CEO Brian Niccol took the helm in February 2025. Nichol said the company would cut 1100 jobs and not fill several hundred other position. Months later, the company announced another 900 job losses for its non retail workers. As part of a $1 billion restructuring plan, Starbucks had 9,000 US non retail workers and 5,000 international employees working in regional support operations roles as of September 28, 2025, according to a regulatory filing. During Nichols tenure, the company has embarked on an extensive and fruitful turnaround of its US Business. Coffee giant sales slumped as increased competition and more budget conscious consumers weighed on demands for its drinks. Under nickels, Starbucks has improved coffee operations in added buzzy new menu items, reintroduced seating to its locations and beefed up staffing at its coffee house. So Sree, I can tell you they're opening up a Starbucks less than three miles away from me in North Brantford, Connecticut. Meanwhile, the other coffee company, Dunkin, is preparing to enter the Canadian market going after Tim Hortons. Oh, I don't know if I want a piece of that action. Those Canadians not really liking American brands these days.
- [11:01]
B
Let's see, what would that be? Peter Timbits will become Dunk Bits.
- [11:06]
A
I think that, I think there's going to be a battle and ensuing and take it from the bourbon business. If you're an American brand, you're kind of Persona non grata in Canada these days. But we'll see what they've got in store. Sree, over to you.
- [11:20]
B
All right, so now we move to Target. A group of activists investors is urging Target shareholders who vote against reelection of Executive Chair Brian Cornell, who was the previous CEO and lead Independent director Christine Leahy at the retailer's annual shareholders meeting in June. Amongst the reasons cited is Leahy's oversight of the decision to retain former CEO Cornell as executive chair and special advisor, per letter to shareholders filed in Notice of Exempt Solicitation on Friday. In our view, Target has endured years of strategic and operational missteps that have led to significant under performance compromising long term shareholder value, the letter from Mercy Investment Services, Soc Investment Group and Trillium Asset Management states. The recent CEO succession does not signal that the board is focused on the genuine reset we believe is critical to turn the company around. While Target did not directly comment on the activist investor letter, the retailer directed Retail dive to its 2026 proxy statement which outlines the directors nominated the respective qualifications. Cornell's departure CEO was first announced last August, which company veteran Michael Fidelke named as a successor. The move is announced. Some industry experts question how Fidelke would be able to make the necessary changes at the struggling company with his former boss Cornell in remaining in the boardroom, especially as the executive chair. Fidelke formally took over the CEO role more operational nature in February and has since unveiled some of the core components of his turnaround strategy. The approach centers on an effort to regain merchandising authority, which includes revamps of the beauty and baby sections in store as well as refresh some of Target's private label brands. Given the persistence performance weakness as a Target, we were surprised at the board's decision to promote former CEO Fidelki rather than hire an outsider, activist investor said in their letter. While we are prepared to give Mr. Fidelke a chance to run the company and see the performance turnaround, the pitfalls of this decision are compounded by former CEO Cornell's continued presence on the board in the powerful executive chair role and advisor to management. Although the arrangement is slated to be short lived, lasting until March 27, we believe that Target is a critical juncture and cannot afford another year of the status quo. Talk about a retailer Peter Hayday's automatic choice for new moms, now struggling and having to repack departments. You know, personally, I think I have shopped a lot at Target when both Rhea and Laura were born. What about you, Peter?
- [13:38]
A
It's. It's a staple. No question about that. Sree that's wrapping this week's Commerce Rift reminder. Check out our recent conversation with Barbara Connors and Brian Dowie with KRoger Precision Marketing Sri, and my recap of our visit to Amazon upfront. If anything we covered this week sparks a thought. Drop it in the comments, send us an email. We read all of it. And if you're not following us on LinkedIn, Instagram, TikTok, Facebook and YouTube, well, now's the time. We'll see you next week. The content in this podcast episode is provided for general informational purposes only. By listening to our episode, you understand that no information contained in this episode should be construed as advice from CPG Guys, LLC where the individual author, hosts or guests, nor is it intended to be a substitute for research on any subject matter. Reference to any specific product or entity does not constitute an endorsement or recommendation by CPGuys LLC. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. The views expressed by CPTGuys LLC do not represent the views of their employers or the entity they represent. CPTGuys LLC expressly disclaims any and all liability or responsibility for any direct, indirect, incidental, special, consequential or other damages arising out of any individual's use of, reference to, or inability to use this podcast or the information we present in this podcast.